Matt Levine’s Money Stuff: You Want Some Stocks That Go Down

Tax long/short

One useful intuition of modern finance is that stocks are all kind of the same. Oh they’re not, they’re not, this isn’t true. But lots of stocks are interchangeable to some degree, particularly if you own a lot of them. A fair amount of the returns of many stock portfolios are determined by the returns to the overall market, to industry sectors, and to other well-known factors like value and size. You could construct a diversified portfolio of 100 stocks that is reasonably well correlated with the S&P 500 Index, and then you could construct a diversified portfolio of ...